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Accounting200 Test Bank Ch. 3EXAM 2025 PRACTICE GRADED A+ QUESTIONS WITH
CORRECT ANSWERS 2025-2026 VERIFIED
Under a periodic inventory system, the buyer does not use which of the
following accounts
in recording purchases and related transactions?
A) Merchandise Inventory
B) Purchase Returns and Allowances
C) Purchase Discounts
D) Purchases
A) merchandise inventory
Under a periodic system, the payment of shipping costs on goods received
from the vendor
will increase the:
A) merchandise inventory account.
B) cost of goods sold account.
C) transportation-out account.
D) transportation-in account.
D) Transportation- in account
The chief advantage of the periodic system is:
A) efficiency and ease of recording.
B) immediate feedback on the inventory on hand at any time during the period.
C) timely discovery of losses due to theft.
D) better control over inventory.
A) Efficiency and ease of recording
Net income percentage is equal to:
A) Net Sales divided by Net Income
B) Net Income divided by Net Sales
C) Total Equity divided by Net Sales
D) Net Income divided by Gross Margin
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B) Net Income divided by Net Sales
Ashton Company uses the perpetual method. The company's inventory
account had a $6,600
balance as of December 31, Year 1. A physical count of inventory shows only
$5,900 of
merchandise in stock at December 31, Year 1. How does the related adjusting
entry affect the
financial statements?
A) Assets increase.
B) Expenses increase.
C) Cash flow from operating activities decreases.
D) All of these answer choices are correct.
B) Expenses increase.
Use the following account numbers and corresponding account titles to
answer the following
question.
Account No.
Account Title
(1)
Cash
(2)
Merchandise inventory
(3)
Cost of goods sold
(4)
Transportation-out
(5)
Dividends
(6)
Common stock
(7)
Selling expense
(8)
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Loss on the sale of land
(9)
Sales
Which accounts would affect operating income?
A) Account numbers 2, 4, and 9.
B) Account numbers 3, 5, 7, and 9.
C) Account numbers 3, 4, 7, and 9.
D) Account numbers 3, 4, 7, 8 and 9.
C) Account numbers 3, 4, 7, and 9.
A company using the perpetual inventory method paid $250 cash to have
goods delivered
from one of its suppliers. The payment of $250 for transportation-in is
considered a(n):
A) asset source transaction.
B) asset use transaction.
C) asset exchange transaction.
D) claims exchange transaction.
C) asset exchange transaction
Which of the following statements is true about period costs?
A) Most period costs are expensed in the period the costs are incurred.
B) Period costs are expensed when the products associated with these costs
are sold.
C) Period costs are usually recorded as assets.
D) Period costs do not adhere to the matching principle.
A) Most period costs are expensed in the period the costs are incurred
Which of the following is considered a period cost?
A) Transportation cost on goods received from suppliers.
B) Advertising expense for the current month.
C) Cost of merchandise purchased.
D) None of these answer choices are considered a period cost.
Accounting200 Test Bank Ch. 3EXAM 2025 PRACTICE GRADED A+ QUESTIONS WITH
CORRECT ANSWERS 2025-2026 VERIFIED
Under a periodic inventory system, the buyer does not use which of the
following accounts
in recording purchases and related transactions?
A) Merchandise Inventory
B) Purchase Returns and Allowances
C) Purchase Discounts
D) Purchases
A) merchandise inventory
Under a periodic system, the payment of shipping costs on goods received
from the vendor
will increase the:
A) merchandise inventory account.
B) cost of goods sold account.
C) transportation-out account.
D) transportation-in account.
D) Transportation- in account
The chief advantage of the periodic system is:
A) efficiency and ease of recording.
B) immediate feedback on the inventory on hand at any time during the period.
C) timely discovery of losses due to theft.
D) better control over inventory.
A) Efficiency and ease of recording
Net income percentage is equal to:
A) Net Sales divided by Net Income
B) Net Income divided by Net Sales
C) Total Equity divided by Net Sales
D) Net Income divided by Gross Margin
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B) Net Income divided by Net Sales
Ashton Company uses the perpetual method. The company's inventory
account had a $6,600
balance as of December 31, Year 1. A physical count of inventory shows only
$5,900 of
merchandise in stock at December 31, Year 1. How does the related adjusting
entry affect the
financial statements?
A) Assets increase.
B) Expenses increase.
C) Cash flow from operating activities decreases.
D) All of these answer choices are correct.
B) Expenses increase.
Use the following account numbers and corresponding account titles to
answer the following
question.
Account No.
Account Title
(1)
Cash
(2)
Merchandise inventory
(3)
Cost of goods sold
(4)
Transportation-out
(5)
Dividends
(6)
Common stock
(7)
Selling expense
(8)
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Loss on the sale of land
(9)
Sales
Which accounts would affect operating income?
A) Account numbers 2, 4, and 9.
B) Account numbers 3, 5, 7, and 9.
C) Account numbers 3, 4, 7, and 9.
D) Account numbers 3, 4, 7, 8 and 9.
C) Account numbers 3, 4, 7, and 9.
A company using the perpetual inventory method paid $250 cash to have
goods delivered
from one of its suppliers. The payment of $250 for transportation-in is
considered a(n):
A) asset source transaction.
B) asset use transaction.
C) asset exchange transaction.
D) claims exchange transaction.
C) asset exchange transaction
Which of the following statements is true about period costs?
A) Most period costs are expensed in the period the costs are incurred.
B) Period costs are expensed when the products associated with these costs
are sold.
C) Period costs are usually recorded as assets.
D) Period costs do not adhere to the matching principle.
A) Most period costs are expensed in the period the costs are incurred
Which of the following is considered a period cost?
A) Transportation cost on goods received from suppliers.
B) Advertising expense for the current month.
C) Cost of merchandise purchased.
D) None of these answer choices are considered a period cost.
